SPRING 2014

FOUNDATIONFor the Future

IN THIS ISSUE

Charitable Gift Annuities Honor Alaska Miner John L. McAllen

A Simple 2-Step to Save Taxes

Protect Your Family with a Lifelong Income Stream

Estate Planning Made Easy

New Taxes are Here: What You Can Do to Lower Yours

Discover More Onlinewww.alaska.edu/foundation

Charitable Gift Annuities Honor Alaska Miner, John L. McAllenJane Holt’s estate planning honors her father, Alaska mining engineer John L. McAllen, increases her income and provides scholarships to engineering students. A series of Charitable Gift Annuities through the UA Foundation has allowed her to accomplish all these goals.

John McAllen was born in 1890 in Oregon, graduated from the Massachusetts Institute of Technology, and came to Alaska in 1913. He worked at many mines in the state including Kennecott mine in LaTouche and Lucky Shot mine in Wasilla. His daughter Jane was born in Oregon and came to Alaska with her mother in 1923. She was raised at the Wasilla mine, ate her meals with the miners, and watched as ore from the mine was removed via the overhead trolley.

In 1929 McAllen retired and moved to Seattle. He later returned to Alaska to continue mining and to join the faculty at the University of Alaska in Fairbanks. He died in 1944. His daughter Jane Holt attended Bryn Mawr, married and worked for many years at the Social Security Administration. She returned to Alaska with an Elderhostel Group Tour and lived in Fairbanks for 10 years before retiring to Colorado.

Holt established her first Charitable Gift Annuity at the Foundation in 2010. This year she completed her fourth such planned gift. Each provides her with a guaranteed income for the rest of her life based on her age. When the annuity payments cease, the remainder will establish a perpetual endowment in her father’s name, the John L. McAllen Memorial Scholarship for engineering students.

“The Charitable Gift Annuities have given me enough additional income to afford a better living arrangement and to establish a scholarship to honor my father, which I had wanted to do for many years,” Holt said. “Most important, it will provide scholarships to students at UAF who are struggling to work their way through school.”

Holt’s generosity has bettered her living situation, provided a lasting benefit to the university’s students and provided a permanent tribute to the memory of her father who did so much for Alaska’s mining industry.

To learn more about how you can use a Charitable Gift Annuity to achieve your estate planning goals, call us, send us an e-mail, or check and return the enclosed response card.

Mine engineering students throughout the University of Alaska System will benefit from the John L. McAllen Scholarship.

A Simple 2-Step to Save Taxes

Even though taxes have risen, there are a few simple steps you can take to reduce your overall tax bill this year. Here are some ideas to consider:

Reduce Investment TaxesThe 3.8% Medicare surtax applies to almost any money you earn from investments. Lower

your taxable investment income by shifting some of it to family and to charity, such as:

• A child who is not subject to the 3.8% surcharge.

• A charity—and receive an income tax deduction this year.

Reduce Overall Income to a Lower Bracket

Lower your income below the healthcare tax threshold ($200,000 for individuals and $250,000 for married couples) and you will avoid the 3.8% surtax. Reduce income by:

• Making a gift of income producing property to family or charity.

• Transferring your income producing property to a charitable remainder trust that can help you control your income.

You can lower your tax bill this year. If you are interested in learning about a life income gift that lowers your taxes and gives money back to you, we can provide you with an illustration of your benefits. If you want to simply make an outright gift to lower your taxes, we can help with that too.

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Tax Changes and Their ImpactHere is a quick look at tax changes within the last two years and their impact on your income.

IF YOU ARE AN INDIVIDUAL:

With more than: You pay:$200,000 in income 0.9% Medicare tax$200,000 in modified adjusted gross income

3.8% Medicare surtax on net investment income

$400,000 in taxable income 39.6% top marginal income tax rate

IF YOU ARE A MARRIED COUPLE:With more than: You pay:$250,000 in income 0.9% Medicare tax$250,000 in modified adjusted gross income

3.8% Medicare surtax on net investment income

$450,000 in taxable income 39.6% top marginal income tax rate

Please contact us or visit our website to learn about efficient ways to save taxes and help charity this year.

New Taxes are Here What You Can Do to Lower YoursWith tax season upon us, there are a number of changes that might affect you. You could find yourself paying a higher tax bill, even if nothing changed for you personally last year (income, marriage, financial situation, etc.). While you can’t do anything about last year, there are positive steps you can take to avoid taxes this year.

A Simple 2-Step to Save Taxes

Reduce Overall Income to a Lower Bracket

Lower your income below the healthcare tax threshold ($200,000 for individuals and $250,000 for married couples) and you will avoid the 3.8% surtax. Reduce income by:

• Making a gift of income producing property to family or charity.

• Transferring your income producing property to a charitable remainder trust that can help you control your income.

You can lower your tax bill this year. If you are interested in learning about a life income gift that lowers your taxes and gives money back to you, we can provide you with an illustration of your benefits. If you want to simply make an outright gift to lower your taxes, we can help with that too.

Estate Planning Made Easy

While an attorney should always draft your will, we can help demystify the process and prepare you for meeting your attorney with these simple steps:

ITEMIZE YOUR ASSETS—Take a piece of paper and draw a line down the middle. On the left side, write something you own. On the right side, write the name or names of the person(s) you wish to receive that item or asset.

ORGANIZE YOUR ESTATE—Make the process of organizing your estate and plans even easier by downloading our free wills guide. This fill-in-the-blank guide walks you through the process of gathering information about what you own, your family and your goals.

WRITE DOWN QUESTIONS—Consider practical questions, such as, “If I give my house to my adult son and my adult daughter, what will they do with it?” If you come up with a question that you can’t seem to find a solution for, make a note to ask your attorney.

REVIEW YOUR PLANS FOR FAMILY—You can give some assets to family right away and others over time. Ask us how you can provide an income stream or a lump sum to a loved one and achieve your personal and inheritance goals.

CONSIDER CHARITY—Remember to include any charities that are important to you in your plan. If you have given during life, then consider providing for these organizations through your estate. Ask us about plans like charitable remainder trusts and gift annuities that can help your family and our mission.

VISIT YOUR ATTORNEY—Bring the information you have gathered and questions to your attorney. Your attorney can draft a will or trust that will achieve your goals. You complete the plan through a simple signing process.

UPDATE YOUR PLAN—Update your estate plan as your life changes. Marriages, births, and deaths are all events that may make you want you to revise your plans.

In a nutshell, estate planning is really what you want done with what you own. The good news is, you can provide for the people and causes important to you by taking simple steps now. Creating your plan for the future can be easy and even enjoyable.

Almost everyone feels better with a plan. It is not too complicated to complete your estate plan and achieve peace of mind. Visit our website (www.alaska.edu/foundation) and use our online will planning tool, or check and return the enclosed response card to request our printed will guide, “Planning Your Legacy.”

Tax Changes and Their ImpactHere is a quick look at tax changes within the last two years and their impact on your income.

IF YOU ARE AN INDIVIDUAL:

With more than: You pay:$200,000 in income 0.9% Medicare tax$200,000 in modified adjusted gross income

3.8% Medicare surtax on net investment income

$400,000 in taxable income 39.6% top marginal income tax rate

IF YOU ARE A MARRIED COUPLE:With more than: You pay:$250,000 in income 0.9% Medicare tax$250,000 in modified adjusted gross income

3.8% Medicare surtax on net investment income

$450,000 in taxable income 39.6% top marginal income tax rate

Please contact us or visit our website to learn about efficient ways to save taxes and help charity this year.

New Taxes are Here What You Can Do to Lower YoursWith tax season upon us, there are a number of changes that might affect you. You could find yourself paying a higher tax bill, even if nothing changed for you personally last year (income, marriage, financial situation, etc.). While you can’t do anything about last year, there are positive steps you can take to avoid taxes this year.

Scott Taylor, Gift Planning Manager910 Yukon Drive, Suite 206PO Box 755080Fairbanks, Alaska 99775-5080

If you are interested in joining the Legacy Society by providing for the University of Alaska through your will or estate plan, or if you wish to learn more about planned charitable gifts, please contact the University of Alaska Foundation. If you have already provided for the University of Alaska in your will or estate plan, please let us know so we can thank you.

University of Alaska FoundationPhone 907-450-8030

Facsimile 907-450-8031foundation@alaska.edu

Here is how a testamentary unitrust can work to benefit you, your family and charity:

1. You include a provision in your will or trust that directs that, when you die, a charitable remainder unitrust will be created to benefit your loved one(s).

2. Upon your death, your personal representative or executor follows your directions and establishes the trust.

3. The trust is funded with assets from your estate that could include cash, stock, or even real estate.

4. The trust then (generally) sells the property tax free and invests the proceeds in a way that benefits your loved ones (the beneficiaries) for the long-term.

5. The trust typically pays the beneficiaries a percentage of the trust assets each year. If the trust grows, your family can potentially receive additional income each year. The income may be paid for one or more lives or up to 20 years.

6. After all payments have been made to the beneficiaries, the remainder goes to a charity or charities of your choosing.

A testamentary charitable remainder unitrust can provide you with great peace of mind. You can live each day knowing you have provided for your family and left a remainder legacy to a charity that is important to you.

Check and return the enclosed response card or call or e-mail us to learn more about the testamentary unitrust and the steps you can take to provide for family, help our cause, and give yourself the comfort of knowing you have provided for those people and causes that mean the most to you.

Protect Your Family with Lifelong IncomeDid you know there is a way to provide income to your children or other loved ones after you are gone? A testamentary charitable remainder unitrust can help your family and the causes that are most important to you. If you want to provide for the people you care for the most, this planning option is worth consideration.